No imminent decision in Greece, says Rehn; no debt rollover, says ECB

Ahead of the Eurogroup meeting in Luxembourg on Monday, European Economic and Monetary Affairs Commissioner Olli Rehn has repeated that a decision on further financing for Greece are still a few weeks away, while discussions about possible debt relief for Athens will not take place until next year.

“We will in the coming weeks reflect and then decide how to proceed with Greece concerning its financing needs and potential fiscal gap and then at some point, probably later on next year once we have seen Greece has produce a primary fiscal surplus, we will deal with debt sustainability,” said Rehn in response to a reporter’s question.

Earlier, his spokesman Simon O’Connor rejected reports in the Greek media purporting to have been based on comments Rehn made while in Washington about relaxing fiscal consolidation in Greece.

“Since Olli Rehn did not make any comments on Greek fiscal policy while in DC, press reports on this subject appear entirely fabricated,” O’Connor wrote on his Twitter account.

Finance Minister Yannis Stournaras is due to update on Monday his eurozone counterparts on Greece’s progress in implementing the measures by the troika but no decisions on the country’s future are expected at the Eurogroup meeting.

Issues such as how to cover a potential funding gap and whether Greece will need a third bailout are to be put off. However, the head of the Euro Working Group, Thomas Wieser, is expected to visit Athens on Wednesday to discuss the options available to Greece and its partners.

Finance Minister Yannis Stournaras has suggested in an interview that Greece could overcome any financing gap in the future if the European Central Bank and the eurozone’s central banks agree to rollover some of the Greek debt they hold.

The ECB and the central banks hold 19 billion euros worth of Greek bonds that mature by 2016. Of this, 10 billion euros is payable in 2014. In his interview with Naftemporiki newspaper, Stournaras suggests that rolling over some of this debt would solve the funding gap problem.

Kathimerini understands the government is also looking at rolling over 4.4 billion euros of Greek bonds held by local banks.

So far, the ECB has ruled out any debt rollovers as it regards them to be monetary financing of a member state and ahead of Monday’s meeting ECB executive board member Joerg Asmussen indicated that Frankfurt’s position is not about to change.

Asmussen said that it was not possible for the ECB to roll over the Greek bonds it is holding.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.